What About Government Accountability?

By Rep. Ron Paul (R) TX

Accounting scandals dominated the headlines last week, and publicity-hungry politicians from both the House and Senate enjoyed acting self-righteous while grilling WorldCom executives. However, the message that Congress will clamp down on corporate accounting practices rings hollow with at least one journalist. Neil Cavuto from Fox News recently offered a very important question that desperately needs to be asked of Congress: "Who the heck are YOU to judge? Given the incredible fiscal mismanagement that pervades the federal government, Congress is "throwing stones from a very big glass house," as Mr. Cavuto puts it. It's refreshing to hear Mr. Cavuto point out the hypocrisy of politicians standing in judgment of executives whose misdeeds pale in comparison to their own reckless spending.

This does not mean corporate America is innocent. Many big corporations soak taxpayers for billions in government subsidies every year, while using political influence to avoid fair competition in the marketplace. Criminal conduct by executives at Enron, WorldCom, or any other company should be prosecuted vigorously under state fraud laws. If these executives indeed lied to investors, presented false earnings statements, or otherwise stole from shareholders, they should return the stolen money and serve jail time.

Yet Mr. Cavuto is absolutely right. No corporation on earth comes close to the accounting fraud practiced year after year by the federal government. In fact, there is no real accountability at all for the trillions in tax dollars raised and spent annually by Congress and our entrenched federal agencies. The official "accounting" that does take place is a sham. Every year Congress creates a meaningless budget, the Fed prints phony money, the Budget office issues false revenue forecasts, and the administrative agencies waste billions in the most unproductive ways imaginable. Literally tens of billions of dollars go unaccounted for every year, simply disappearing down bureaucratic black holes. This hardly represents a standard against which corporations should be judged!

None of the free-market restraints against financial mismanagement apply to government. The federal government doesn't need to raise money by meeting a market demand or raising investment capital- it simply takes what it wants through taxes, which can be raised at will. It never has to operate profitably or efficiently; witness Amtrak and the Postal Service. It also has no incentive to cut costs. In fact, federal agencies scramble to spend every last penny of their budgets to justify more the next year. There is no stock price to worry about, and nobody tracks government "performance" against earlier years. Nobody ever gets fired. Simply put, the money is not hard-earned, so it's not well-spent.

So why is there not more outrage about government financial accountability? Of course we read the occasional news article lamenting $400 hammers at the Pentagon, but for the most part Congress gets a free pass on its own fiscal mismanagement. What we hear instead are calls for more regulation of our already heavily regulated mixed economy. Few suggest that federal interference in the market, especially Federal Reserve expansion of credit, creates the distortions that make it possible for corporations to become so overvalued in the first place. No one mentions that market forces ultimately cut through the distortions, causing the stock prices of fraudulent corporations to plummet. Instead we hear denunciations of the free market, and calls for more regulations from the very career politicians who are so completely unfit to manage anything.

Of course Congress could clean up its financial mess, but ultimately it is voters who must demand accountability for their tax dollars. Remember that you give government at all levels nearly half of everything you earn. If you invested that much into a private company, don't you think you would keep a close eye on it and demand accountability as a shareholder? The only thing we know for sure about the federal budget is that it will go up each year unless and until voters remove the politicians who insist on taxing, spending, and borrowing us to death.

Jail For Liars? Start With Politicians!

By Chuck Baldwin
July 16, 2002

Responding to recent revelations of massive deception and untruthful reporting by corporate America, President Bush proposed jail time for business executives who lie in their accounting records. If we are going to start putting people in jail for deceptive financial records, however, we need to start with politicians.

The Chicago Sun-Times recently reported, "Exaggerated earnings, disguised liabilities, off-budget shenanigans - they are all there in the government's ledgers on a scale even the biggest companies could not dream of matching."

Republican Representative Bill Frenzel said, "If you look at the books of the corporate world, even the fraudulent ones, they are less subject to manipulation than the federal budget is. Members of Congress get re-elected by bringing home roads and armories and university grants and heaven knows what else. Everyone wants frugality, but only after they get their road or bridge."

Even as President Bush issues the jail call for corporate CEO's, he is busy restating federal earnings and expenses. Originally, Bush projected an annual deficit of $106 billion. After the Enron and WorldCom scandals, however, he now says the deficit will be $165 billion. He has even changed the numbers of the projected 10-year surplus. He originally predicted a whopping $5 trillion surplus. He now says it will be $1.35 trillion. Incredibly, the stroke of a pen wiped out more than $4 trillion. Talk about deceptive numbers!

The fact is, the government routinely lies to the American people about finances and virtually everything else. Despite claims to the contrary, President Bush continues the Clinton-era practice of exporting modern technology to Communist China. According to the current edition of Insight Magazine, "On the Bush
administration's watch, highly sensitive U.S. technology still is being exported to the People's Republic, where it is being used to build better weapons."

Insight goes on to report, "The Bush administration has been 'as bad, if not worse' than the Clinton administration when it comes to the transfer of sensitive technologies to (China), claims Tom Fitton, president of Judicial Watch, a nonpartisan public-interest law firm."

Furthermore, this administration has lied to us about its commitment to the pro-life cause, the pro-family cause, and more. Our own Congressman, Jeff Miller, lied to us. He said he would oppose granting fast track trade authority to the President. He didn't. He said he would oppose the monstrous education bill
recently passed. He didn't.

Those Senators who took an oath to judge the impeachment trial of Bill Clinton on the merits of the evidence and then refused to even examine the evidence deliberately and blatantly lied to God and to the American people! They even told the House prosecutor, David Schippers, that they had no intention of removing Clinton from office.

Politicians from both parties have lied to us about Oklahoma City, Waco, Ruby Ridge, and even the terrorist attacks on September 11. The entire political establishment seems to be composed of habitual, pathological liars.

If we are going to start putting liars in jail, politicians should be the first ones to go!

Daschlegate Offers White House Tempting Target

[ NewsMax ]

Now that top Senate Democrat Tom Daschle has called on President Bush to release the full Securities and Exchange Commission case file into the investigation of Bush's 1990 sale of Harken Energy stock, the White House's search for an effective response has undoubtedly begun.

They won't have to look far.

Turns out that Daschle and his wife, Linda, have their own sealed case files to worry about: records left over from the 1995 Senate Ethics Committee investigation into the alleged cover-up of the Democrat power couple's role in the deaths of three South Dakota Forest Service physicians who perished in a 1994 air crash.

The death plane was a charter aircraft operated by a close Daschle friend. The top Senate Democrat reportedly leaned on regulators to go soft on safety inspections for the charter company before the fatal crash.

Predictably, the Clinton Justice Department and the Senate Ethics Committee didn't do much with wrongful death and cover-up charges alleged by the doctors' widows - despite a blockbuster "60 Minutes" exposť in which the women expressly blamed Daschle for the deaths.

Heightening the Daschlegate intrigue, a Federal Aviation Administration office manager said she was ordered by superiors to destroy documents relevant to the fatal crash to protect Linda Daschle, who was then second in command at the agency.

The Forest Service physicians were killed when a plane operated by B&L Aviation crashed in Minot, N.D., on Feb. 24, 1994. B&L was owned by longtime Daschle crony Murl Bellew, who, before the crash, had asked his senator friend to help when the Forest Service found numerous safety violations with his aircraft.

According to the New York Times, the senator then began "a two-year effort to strip the U.S. Forest Service of authority to inspect air charter companies." What's more, it appears Daschle tried to cover up his attempt to undermine the Forest Service.

In a Feb. 5, 1995, report, the Times revealed:

"[Daschle] initially said that he never pressed the Forest Service to get its inspectors to relax their inspections on B&L. But in November, a senior Daschle aide said that he had, with the senator's knowledge, intervened directly with the Forest Service inspectors who had warned that B&L was unsafe."

More evidence that the senator's denial was untrue emerged when documents turned up showing that Daschle had personally leaned on the Washington supervisors of the inspectors who had given Mr. Bellew's airline an unsafe rating.

The Times explained:

"Two FAA inspectors who spoke on condition of anonymity said in recent interviews that the Senator helped Mr. Bellew when he flunked a safety check in 1987." After Daschle intervened, one agency official was "called on the carpet to explain what happened," one of FAA sources said.

Then there's the account of Cathy Jones, an FAA office manager in Rapid City, S.D.

Jones told investigators that she was ordered to destroy documents relevant to the case because they "contained information with the possible appearance of improper intervention by Senator Daschle on behalf of the FAA."

The documents in question, Jones said, "would make the FAA look bad" because of Mrs. Daschle's top job with the agency.

On Nov. 30, 1995, the Senate Ethics Committee dismissed the complaint of the doctors' widows, issuing the following terse statement:

"The Senate Ethics Committee dismissed a complaint of possible improper conduct made against Sen. Tom Daschle regarding contacts made on behalf of the South Dakota aviation industry. The committee has concluded that contacts and actions by Sen. Daschle and his staff were routine and proper constituent services."

Of course, as with all Senate Ethics Committee probes, the Daschlgate case files were sealed.

Now that the top Senate Democrat has demanded the release of SEC investigative case files gathered during the 1991 probe into President Bush's Harken Energy stock sale, will the Bush White House return the favor and ask for the release of the Ethics Committee's Daschlegate files?

High-Tech Transfers To China Continue

The Bush administration has been "as bad, if not worse" than the Clinton administration when it comes to the transfer of sensitive technologies to the People's Republic of China (PRC), claims Tom Fitton, president of Judicial Watch, a nonpartisan public-interest law firm. Fitton says the Bush administration even has "relaxed the rules put in place during the Clinton years." Specifically, he tells Insight, the administration has allowed the transfer of "computer technology [whose] only practical purpose is for nuclear-weapon design." Fitton says that from the beginning the administration went "full-speed ahead" with China trade and efforts to get the PRC into the World Trade Organization (WTO), which Fitton tells Insight only gives China more opportunities to modernize its military and "get cash" with which to buy high-tech weapons elsewhere.

While few have gone so far as Fitton with such complaints, criticism of U.S. transfers of sensitive technology to China is growing. Accuracy in Media, another Washington watchdog group, echoes Fitton on computer-technology transfers: "President Bush seems to have no clearer vision of what constitutes a strategically sensitive export than did Clinton. For example, Republicans harshly condemned Clinton for exporting high-performance computers to China, but President Bush has more than doubled the control threshold on these computers despite existing intelligence estimates that demonstrate how China's national security benefits from such acquisitions."

Indeed, in his last days as a lame-duck president Clinton made exports of U.S. supercomputers easier by raising the export threshold from 28,000 millions of theoretical operations per second (MTOPS) to 85,000 MTOPS. Bush raised that limit to 190,000 MTOPS. A General Accounting Office (GAO) official tells Insight that the government hadn't done the necessary pre-export analysis and that an "interagency process" led by the Department of Defense should be in place for export controls.

An April 2002 report by the GAO on computer-chip technology transfers to China claims that the government did not do an adequate analysis of the cumulative national-security effects of chip exports to China either, and that most export applications are simply approved. The policy is to approve applications unless it is shown that the items in question "would make a direct and significant contribution to electronic and antisubmarine warfare, intelligence gathering, power projection and air superiority."

Never mind that, as a Pentagon official told the GAO, these chips can be used to improve China's capabilities for pre-emptive long-range precision strikes, information dominance, command and control and integrated air defense.

Another reason the government got a bad grade from GAO was the fact that the Commerce Department hasn't conducted any end-user checks, so it's unknown if the exported technologies are used for military purposes, though experts guess they are.

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